Cyprus charges Capital Gains Tax (CGT) at a flat 20%, but the striking feature of the regime is how narrow it is. CGT applies only to gains on immovable property situated in Cyprus, and to gains on shares in companies that own such property. Gains on listed and unlisted securities, on movable assets, and on real estate located outside Cyprus fall entirely outside the charge. For most investors and company owners, that means no Cyprus CGT at all.
This guide explains exactly what the 20% applies to, the 2026 anti-avoidance extension to "property-rich" shares, the lifetime exemptions that the reform increased, how the taxable gain is computed (including the all-important inflation adjustment), and the wide range of transfers that are exempt. If your disposal involves Cyprus land or buildings — directly or through a company — this is the tax to understand.
What CGT actually applies to
CGT at 20% is charged on gains from:
- the disposal of immovable property situated in Cyprus (land and buildings);
- the disposal of shares in companies that own Cyprus immovable property, where the shares are not listed on a recognised stock exchange; and
- from 2026, the disposal of shares that derive their value indirectly from Cyprus immovable property above the new threshold (see below).
What is not caught is just as important. Gains on the disposal of securities — shares, bonds, debentures, units in funds and similar "titles" — are exempt from both CGT and income tax, unless the shares are property-rich. Gains on immovable property outside Cyprus are not within Cyprus CGT. And gains realised by a person who is taxed on the disposal as trading income are dealt with under income tax instead.
Immovable property situated in Cyprus means land and buildings located in the Republic, together with rights over them. CGT follows the location of the property, not the residence of the seller — so a non-resident selling a Cyprus apartment is within the charge, while a Cyprus resident selling a London flat is not.
The 2026 "property-rich" extension
To stop property being sold tax-free through a chain of holding companies, the 2026 reform lowered the threshold at which shares are treated as property-rich. Previously, shares were caught only where they derived more than 50% of their value from Cyprus immovable property; from 2026 the threshold is 20%. In other words, if 20% or more of the value of the shares you are selling is attributable to Cyprus property, the gain on that property element is within CGT — even where the property is held several layers down a structure.
The rate on these disposals is still 20%; the change is to the scope of what is caught, not the rate. There is also an anti-undervaluation safeguard, so the consideration on an indirect disposal is tested against the underlying fair market value of the property. If you hold Cyprus real estate inside a company or group, factor this into any sale or reorganisation — our tax advisory team can model the position before you transact.
The lifetime exemptions (increased for 2026)
Individuals benefit from lifetime exemptions that reduce the chargeable gain. The 2026 reform substantially increased them:
| Type of disposal | Old exemption | 2026 exemption |
|---|---|---|
| Private / primary residence (conditions apply) | €85,430 | €150,000 |
| Agricultural land (by a farmer) | €25,629 | €50,000 |
| Any other disposal (general) | €17,086 | €30,000 |
These are lifetime allowances, not annual ones, and they are cumulative: a person who has used part of the general €30,000 exemption has that much less to set against a future gain. The €150,000 residence exemption is the most valuable and is subject to conditions about ownership and use of the home.
How the taxable gain is computed
The chargeable gain is the disposal proceeds less the cost of the asset and certain allowable expenses — but a defining feature of Cyprus CGT is that the cost is adjusted for inflation. The original cost (and the cost of improvements) is increased in line with the Cyprus consumer price index from the date of acquisition to the date of disposal, which reduces the gain and recognises that part of any "profit" is simply inflation.
Allowable deductions include the acquisition cost, the cost of improvements, interest on loans taken to acquire the property, and transfer fees and legal expenses. For property owned before 1980, the base cost is the value at 1 January 1980 as recorded by the Land Registry, again indexed forward.
An individual sells a Cyprus property for €400,000. The indexed acquisition cost is €260,000, improvements (indexed) add €20,000, and transfer and legal costs are €10,000 — total deductions of €290,000. The gain is €110,000. Applying the general lifetime exemption of €30,000 (assuming it is unused) leaves a chargeable gain of €80,000, taxed at 20% = €16,000. Figures are illustrative; the indexation depends on the actual dates and published index. Try our capital gains tax calculator.
Transfers that are exempt
A wide range of disposals are exempt from CGT altogether, which is why careful structuring of family and corporate transfers matters:
- Gifts between spouses, and gifts to relatives up to the third degree of kindred;
- Gifts to a family company, where the shareholders are and remain members of the donor's family;
- Gifts to charities and to the Republic of Cyprus;
- Company reorganisations (mergers, divisions and transfers of assets) that meet the conditions;
- Expropriations and certain exchanges of property; and
- gains arising on the death of the owner (Cyprus has no inheritance tax).
Cyprus abolished inheritance tax in 2000, and there is no wealth tax. Combined with the CGT exemptions for family gifts and transfers on death, this makes intergenerational transfer of Cyprus property relatively efficient — but the conditions for each exemption must be met precisely, so document the relationship and the basis of the exemption at the time of the transfer.
Selling Cyprus property the right way
The headline is reassuring: most disposals — securities, foreign property, and many family transfers — attract no Cyprus CGT, and where CGT does apply the inflation adjustment and the increased lifetime exemptions soften it considerably. But the 2026 property-rich extension, the conditions on the residence exemption, and the mechanics of indexation all reward getting advice before you sign.
If you are selling Cyprus property, transferring it within the family, or restructuring a company that owns real estate, talk to us first. Our tax advisory service will compute the gain, apply every exemption you are entitled to, and make sure the disposal is structured efficiently and correctly.